Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Pretax income for 2022, 2021 and 2020 was taxed in the following jurisdictions:

	2022		2021		2020
	(In millions)
U.S.	$	516.5	$	350.2	$	296.3
Foreign	232.9		229.6		174.0
Total	$	749.4	$	579.8	$	470.3

The provision (benefit) for income taxes for 2022, 2021 and 2020 was as follows:

	2022		2021		2020
	(In millions)
Current
U.S.	$	102.8	$	64.7	$	29.5
State and local	14.5		11.0		4.6
Foreign	63.9		60.9		50.2
Total current	181.2		136.6		84.3
Deferred
U.S.	(12.2)		(4.1)		10.1
State and local	(1.0)		(1.4)		1.5
Foreign	(5.3)		(0.6)		(3.4)
Total deferred	(18.5)		(6.1)		8.2
Total provision for income taxes	$	162.7	$	130.5	$	92.5

Deferred tax assets (liabilities) at December 31, 2022 and 2021 were:

	2022		2021
	(In millions)
Allowances and accruals	$	21.1	$	10.3
Employee and retiree benefit plans	17.8		23.6
Inventories	12.0		11.7
Foreign tax credit and other carryforwards	15.0		11.9
Lease liabilities	26.9		(24.8)
Right of use assets	(25.9)		25.7
Depreciation and amortization	(301.3)		(222.0)
Other	(12.8)		(16.6)
Total gross deferred tax (liabilities)	(247.2)		(180.2)
Valuation allowance	(15.0)		(11.9)
Total deferred tax (liabilities), net of valuation allowances	$	(262.2)	$	(192.1)

The deferred tax assets and liabilities recognized in the Company’s Consolidated Balance Sheets as of December 31, 2022 and 2021 were:

	2022		2021
	(In millions)
Noncurrent deferred tax asset - Other noncurrent assets	$	2.0	$	4.3
Noncurrent deferred tax liabilities - Deferred income taxes	(264.2)		(196.4)
Net deferred tax liabilities	$	(262.2)	$	(192.1)

The Company had prepaid income taxes, recorded within Other current assets on the Consolidated Balance Sheets, of $15.1 million and $9.1 million as of December 31, 2022 and 2021, respectively.

The Provision for income taxes differs from the amount calculated by applying the statutory federal income tax rate to pretax income. The calculated amount and the differences for 2022, 2021 and 2020 are shown in the following table:

	2022				2021				2020
	(In millions)
Pretax income	$	749.4			$	579.8			$	470.3
Provision for income taxes:
Computed amount at statutory rate of 21%	$	157.4	21.0	%	$	121.8	21.0	%	$	98.8	21.0	%
State and local income tax (net of federal tax benefit)	11.4		1.5	%	8.0		1.4	%	5.9		1.3	%
Taxes on non-U.S. earnings-net of foreign tax credits	12.4		1.7	%	9.2		1.6	%	8.4		1.8	%
Global Intangible Low-Taxed Income	2.0		0.3	%	0.4		0.1	%	(2.7)		(0.6	%)
Foreign-Derived Intangible Income Deduction	(11.9)		(1.6	%)	(7.5)		(1.3	%)	(4.9)		(1.0	%)
Share-based payments	(2.6)		(0.4	%)	(3.5)		(0.6	%)	(9.8)		(2.1	%)
Other	(6.0)		(0.8	%)	2.1		0.3	%	(3.2)		(0.7	%)
Total provision for income taxes	$	162.7	21.7	%	$	130.5	22.5	%	$	92.5	19.7	%

The Company has $45.3 million and $40.6 million of permanently reinvested earnings of non-U.S. subsidiaries as of December 31, 2022 and 2021, respectively. No deferred U.S. income taxes have been provided on the $45.3 million of earnings that are considered to be permanently reinvested. The Company does not expect these earnings to incur U.S. taxes when ultimately repatriated other than potentially U.S. federal, state and local taxes on foreign exchange gains or losses recognized on the distribution of such earnings. Such distributions could also be subject to additional foreign withholding and foreign income taxes. The amount of unrecognized deferred income tax liabilities on currently permanently reinvested earnings is estimated to be $6.8 million and $6.1 million as of December 31, 2022 and 2021, respectively.

During the years ended December 31, 2022, 2021 and 2020, the Company repatriated $199.9 million, $116.0 million and $27.0 million of foreign earnings, respectively. These actual distributions resulted in no incremental income tax expense other than tax impacts on foreign exchange gains or losses. These repatriations represent distributions of previously taxed income.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2022, 2021 and 2020 is as follows:

	2022		2021		2020
	(In millions)
Beginning balance January 1	$	0.1	$	1.1	$	3.7
Gross increases for tax positions of prior years	—		0.1		—
Gross decreases for tax positions of prior years	—		(0.3)		—
Settlements	—		(0.2)		(2.6)
Lapse of statute of limitations	(0.1)		(0.6)		—
Ending balance December 31	$	—	$	0.1	$	1.1

As of December 31, 2022, the Company has no remaining unrecognized tax benefits that would affect the Company’s effective tax rate. The tax years 2017-2021 remain open to examination by major taxing jurisdictions. Due to the potential federal, state, and foreign examinations, it is reasonably possible that the Company’s gross unrecognized tax benefits balance may change.

As of December 31, 2022, the Company has minimal deferred tax assets on non-U.S. and U.S. state net operating loss carryforwards of $0.1 million and $0.8 million, respectively. The entire balance of net operating losses across jurisdictions, the majority of which relates to acquisitions, is available to be carried forward indefinitely. There is no valuation allowance as it is more-likely-than-not that the net operating losses will be realized.

As of December 31, 2022, the Company has deferred tax assets on non-U.S. capital loss carryforwards of $3.0 million with a full valuation allowance. The non-U.S. capital loss can be carried forward indefinitely.

As of December 31, 2022, the Company has deferred tax assets with a full valuation allowance recorded against foreign tax credit carryforwards for U.S. federal purposes of approximately $11.9 million. The U.S. federal foreign tax credit carryforward will expire between 2029 and 2032.